The Virginia Court of Appeals recently ruled that a lawsuit seeking to remove a trustee does not trigger a no contest clause. This decision is both valuable and timely, as it clarifies what many attorneys in Virginia have long believed, yet lacked a clear court ruling to affirm.
Summary of Ruling
The case is titled Bakwin v. Schlesginer, 2025 WL 2956067 (2025). At issue was a will that established a series of testamentary trusts. A testamentary trust is a trust created under the terms of a will rather than through a separate trust instrument. The executor of the estate was also designated to serve as trustee of these trusts. During the administration of the estate, the beneficiaries objected to the attorney’s fees incurred by the executor. The Commissioner of Accounts ruled that the executor had to return some of the attorney’s fees. The beneficiaries then sought to cite that ruling, coupled with other factors, in moving the court to prevent the executor from qualifying as trustee. They instead asked the court to appoint a different trustee pursuant to Virginia Code Section 64.2-1405(A)(viii), which allows a circuit court to appoint a trustee for a testamentary trust, other than one named in a will, for good cause shown.
The executor and named trustee responded by claiming that the beneficiaries triggered the no contest clause contained in the will. The no contest clause stated that any beneficiary who sought to “void, nullify or set aside all or any part of” the will would be disinherited. The trial court agreed with the executor and held that the beneficiaries’ motion to disqualify the trustee triggered the no contest clause.
The Court of Appeals disagreed and overturned the ruling of the trial court. In doing so, the Court of Appeals provided the following discussion:
Thus, the no contest clause applies to proceedings to invalidate the legal effects of the will or its provisions. But it does not necessarily apply to proceedings that merely threaten to undermine a provision’s practical effects. Put another way, it prohibits attacks against the validity of the will or its provisions, but it does not prohibit beneficiaries from participating in proceedings that are collateral to issues raised in the will.
The appellants did not challenge the validity of any provision in Bakwin’s will but merely sought to intervene in a separate qualification process that the Code places squarely within the circuit court’s authority.
The Court of Appeals also provided helpful commentary that seems to strongly imply that its ruling would similarly apply to trustee removal lawsuits. It stated: “According to the Third Restatement of Trusts, the same reasons that may justify a court removing a trustee may also justify the court refusing the trustee’s appointment in the first place.”
Implications of Ruling
The court’s decision in Bakwin provides valuable clarification of Virginia law. Before this ruling, there was no clear statement that a trustee removal claim did not trigger a no contest clause. In fact, there was commentary in a case that appeared to indicate that Virginia may actually hold that trustee removal claims do trigger no contest clauses.
The Virginia Supreme Court issued a ruling in Keener v. Keener, 278 Va. 435, 682 S.E.2d 545 (2009) that contained dicta in a footnote that caused some concern on this issue. Footnote 3 in Keener discussed, in dicta, how one may argue that a litigant has triggered a no contest clause by demanding the removal of trustees, but the Virginia Supreme Court did not confront that issue in that case. Bakwin does not specifically mention this aspect of Keener, but the clear implication is that Footnote 3 of Keener should not hold legal weight in Virginia courts.
It is somewhat common for attorneys of unscrupulous trustees to threaten beneficiaries with invoking a no contest clause if the beneficiaries proceed to file a lawsuit seeking the removal of a trustee or seeking to hold a trustee financially accountable for misconduct. The holding in Bakwin will hopefully put an end to that practice. In summary, the ruling in Bakwin represents a significant victory for beneficiaries seeking to ensure accountability, while also providing a crucial clarification of Virginia law on this important issue.
It is important to note that the opinion highlights that the ruling was based on the specific language of the no contest clause at issue in this case. This leaves open the possibility that, in the future, a beneficiary could encounter a no contest clause explicitly stating that a court proceeding to remove a trustee would trigger the clause. The Bakwin holding does not explicitly address that scenario. The Bakwin ruling extensively discusses several relevant sources, including other case law, such as Hunter v. Hunter from the Virginia Supreme Court, and treatises, notably Deborah S. Gordon’s article, “Forfeiting Trust,” 57 Wm. & Mary L. Rev. 455, 474 (2015), which is discussed at length in Hunter. These sources collectively suggest that a no contest clause of this nature may not be enforceable. However, this remains an issue for future consideration, and it is likely that a court will address the matter in the coming years.
With questions or for more information, please reach out to author Will Sleeth or a member of GRSM’s Estate & Trust Litigation practice.